Louise Pratt (WA, Australian Labor Party) Share this | Link to this | Hansard source

I stand in continuation on this important piece of legislation, the Future Made in Australia (Production Tax Credits and Other Measures) Bill 2024. We see in the opposition their obsession with saying no. In this case, it's saying no to investment and more jobs in Western Australia. Let's be clear. Under this legislation, if companies don't produce a processed critical mineral they're not eligible for the tax credit, nor are they eligible until they succeed. Taxpayers don't pay a cent until the industry succeeds. This legislation is about delivering a greater economic benefit to Australia from what we dig out of the ground. Currently we export minerals for a fraction of their processed value. It is worth this chamber remembering that new industries have often needed government support to get off the ground. This is what other nations are doing with tax incentives. There is also a trend towards the nationalisation of critical minerals. So we are at a very critical point in competing for the finance of critical minerals projects and Australia's role in future supply chains. Frankly, we are at a critical stage for the future of our mining industry. We are competing to attract investment now.

Meanwhile, the coalition's approach to this issue was grants for pet projects, and it was universally critiqued as not being fit for purpose. And they have absolutely nothing on the table now. They have no interest in tackling Australia's dig-and-ship culture that has seen Australia fail to add value to our own resources during previous mining booms. The coalition's Western Australian senators and MPs are turning their backs on their communities. Be warned: they will be relying on tax from WA's resources sector to help fund the $600 billion for the seven risky and expensive nuclear power stations that the Australian taxpayer will foot the bill for. This includes an uncosted nuclear power station for the town of Collie.

But what Collie wants is support from this legislation to get projects off the ground, projects that will get off the ground with the passing of this bill. Hardworking people have, for decades, worked in Collie in the coalmines and power stations that have been the engine of our great state. However, as solar panels on our homes drive cheaper energy production, it has been known for some time that the ageing power station is set to close by the end of this decade. Meanwhile, we have the member for Canning wanting to address issues by arguing for a nuclear fantasy and Collie coal exports in a continuation of their dig-and-ship mentality. It's also worth remembering that Collie coal exports are also a fantasy, as the last ship of coal exported from Collie caught fire because it's not stable enough for export. The coalition are simply not working with communities. They aren't working with industry. Instead, they simply want to impose their own irrational agenda.

In contrast, look to the work of the Collie Just Transition group, made up of WA government, industry, businesses, unions and community organisations. They have come together to build a just transition plan for Collie. They've put forward an agenda that sees the maximisation of opportunities for affected workers, a plan that diversifies the local economy, brings millions of dollars of new investment into the region. And it's a plan that includes projects that will get off the ground with the support of this legislation. I note that it includes a magnesium refinery where Magnium Australia are looking to CSIRO patented technology for the clean extraction of magnesium metal. It also includes International Graphite's mine-to-market battery graphite materials project.

The people of Collie want a say in their future as well as real investment that brings money and jobs into their town, not a taxpayer funded nuclear power plant or a coal fuelled fantasy that ships pollution and their jobs offshore. The people of Collie already know that critical minerals are literally critical to their future. The benefit this production tax credit will bring to Collie is just one local example of Labor's plan to grow our WA economy, an economy that helps workers earn more with skilled jobs in industries with a future—like critical minerals. There are communities right around WA that will benefit from this production tax credit. There are projects in Perth. There are about 12 in Forrest and 20 or so in Durack. From the Northern Territory and South Australian border of WA to Esperance, the south-west and the Kimberley, communities are being ignored by the Leader of the Opposition, Mr Dutton; ignored by the member for O'Connor; and ignored by the Forrest candidate Ben Small, a former Liberal senator in this place. They should all know better. It's clear the view of the leader of the WA Liberals, Libby Mettam, doesn't matter either. She said, 'We will support this measure,' but she doesn't have a vote. Those opposite do.

Shane Love, Leader of the Nationals and Leader of the Opposition, was also ignored when he said, 'It is essential not just for Western Australia and not just for Australia but for the western world.' What about Mia Davies, the Nationals candidate for the federal seat of Bullwinkel, who said, 'Downstream initiatives are welcome'? Well, I'm sorry to say, Mia Davies, that under a Dutton coalition government, which you aspire to be part of, such initiatives will not be welcomed.

Nor are the coalition listening to Australian business. The coalition position on this bill does not reflect calls from the CEO of Australian Strategic Minerals, Rowena Smith, or from the managing director of Wesfarmers, Rob Scott. They're ignoring Rebecca Tompkinson of the Chamber of Minerals and Energy WA, who has said, 'This is a smart targeted use of the tax system to solve big problems, leverage our competitive advantages and enhance Australia's prosperity.' They ignored Warren Pearce, CEO of the Association of Mining and Exploration Companies, when he said, 'This bill needs to pass parliament.'

Investors are looking for a reason to choose Australia over other countries right now. The window of opportunity is narrow, and the coalition doesn't care that our investment and jobs will go elsewhere. This issue is a stark reminder to Western Australian voters about what the coalition thinks about our state. You are ignoring the real issues and instead focusing on 'ship the sheep'. You don't actually want to keep sheep. This would mean keeping them onshore.

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

Order! Senator Pratt, I remind you to address your remarks through the chair.

Louise Pratt (WA, Australian Labor Party) Share this | Link to this | Hansard source

Those opposite don't actually want to keep the sheep. That would mean keeping them onshore to be processed in WA, adding value to our exports and bringing jobs and local economic benefits. Meanwhile, they also want to waste the opportunity to add value to our natural resources—dig and ship.

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

Senator Pratt, I remind you that imputations to motive are out of order.

Louise Pratt (WA, Australian Labor Party) Share this | Link to this | Hansard source

The coalition take Western Australia for granted, just like they have taken Western Australia's mining revenues—which underpin our national economy—and tax revenue for granted. How will they pay for their $600 billion worth of nuclear power plants?

In contrast to the coalition's 'dig and ship' mentality, the Albanese government is committed to investing in climate action, to working with other nations to address current supply chain insecurity for critical minerals, and to investing in skilled jobs and in regional communities. It is also committed to getting a bigger and better economic return on what we mine. I'm proud to support this bill and to stand up for a future made in Australia.

David Van (Victoria, Independent) Share this | Link to this | Hansard source

I rise in support of the Future Made in Australia (Production Tax Credits and Other Measures) Bill 2024. However, my support is not without some qualification because, as I said in the debate last year, we need to focus on some key technologies that will assist us to lower emissions, support existing and new industries, and protect our national security. For that reason, I was surprised to see that low-carbon liquid fuels, LCLFs, were not included in this bill as a recipient of those tax credits, especially when many of our international competitors are incentivising their industries to be leaders.

You might ask why I was surprised. There are several reasons. First, low-carbon fuels were included in the priority sectors that made up the key focus areas of Future Made in Australia in the National Interest Framework that went with it, the framework that we agreed to in this place last year. It is in that framework because, as the National Interest Framework states:

Australia is likely to have a comparative advantage in the production of some feedstocks used to produce LCLFs—

low-carbon fuels—

or in the production of LCLFs, or both.

I belief both are vitally important for our country.

Other countries—such as the United States, Brazil and Singapore, amongst others—have all seen the potential that low-carbon liquid fuels offer, and they are moving quickly to reap the benefits. We are in a race to build a whole new industry in Australia, which should be a part of the long vaunted green economy or, as is often sold to us, the creation of a clean energy superpower. It's a noble ambition, but we've to put some effort and some funding into it. We have clear advantages, but we are not the only ones. While countries like Singapore don't have the advantage of our feedstocks, nor the great amounts of renewable energy that will be needed to make low-carbon liquid fuels, they certainly know how to make big bets on nation-building industries.

Low-carbon fuels, which including sustainable aviation fuel and renewable diesel, need to be in this bill as recipients of production tax credits. If they are left out then what we are saying is that we are comfortable for our future to be made in Singapore or some other country but not here. This defeats the most important benefits of producing low carbon fuels here—that is, fuel security, which is vital to our national security. Not only that; we would pass up the estimated 18,000 new direct jobs that are predicted to come from standing up a sustainable aviation fuel production industry, plus the estimated $13 billion that would be added to our GDP. We would effectively load all of these benefits onto ships heading to Singapore, with all the feedstock we would be sending them, and Singapore would benefit as they export it to the rest of the world. As we waste time debating the merits of including low-carbon liquid fuels and building an industry here in Australia, the world will race ahead, leaving us behind. This, I believe, would be unacceptable to most Australians.

The truth is that low-carbon fuels are an indispensable tool to lowering Australians' carbon emissions. A study by Airbus shows that, on average, sustainable aviation fuels can reduce carbon emissions by 80 per cent compared to traditional jet fuel. This is particularly important when we consider that worldwide the aviation industry accounts for up to three per cent of human induced greenhouse gas emissions. Low-carbon liquid fuels are important, as they will play a role in decarbonising the hard to abate transport sector. Unlike hydrogen, which is also important, we have immediate uses for sustainable aviation fuel and biodiesel. We don't need to build masses of new infrastructure such as refrigeration, storage and new transport to get it into use once we're producing it. Our trucks and planes can use it immediately, so, as soon as we build it and we are producing it, it is getting used. It is also worth noting that low-carbon liquid fuels need hydrogen as one of the feedstocks, so standing up a sustainable aviation fuel industry not only builds that industry but also provides an uptake opportunity for our hydrogen production industry, which is in this bill. Instead, to be prepared for the future means we must commit to clear and specific incentives that will ensure this crucial but nascent low-carbon liquid fuel industry flourishes.

But the benefits of the LCLFs are not just limited to emissions reduction. Low-carbon liquid fuels will also support our farmers who will grow the feedstocks that will enable us to develop a strong supply chain and help us build a sovereign fuel capacity. With the prospect of an interregional war drawing ever closer and traditional allies such as United States potentially—and I stress potentially—turning inwards, now is the time more than ever to set the stage for a strong and independent Australia that produces its own fuels and can stand on its own two legs. That won't happen without a sovereign fuel manufacturing capacity, not as long as 91 per cent of our fuel is imported from overseas and we hold only 54 days of strategic fuel reserves, which is barely half of the recommended amount suggested by the International Energy Agency. This is only worsened by the fact that this strategic reserve would have to be shared between both our military and civilian sectors. This would have a devastating effect on our economy during a conflict. If we cannot protect our sea lanes of communication that traditional fuels come in on, how do we keep running the economy? While we remain deeply vulnerable to a blockade, which would cut off most of our fuel, supporting fuel security, in my view, is completely non-negotiable, and helping to support and start an independent low-carbon liquid fuel industry would go a long way to ensuring that we secure our sovereignty and our economy at the same time.

With all of that said, I do support and am a keen advocate for hydrogen production, which is given tax offsets in this bill. But we also need to bear in mind that it will take years to contribute to our economy and our emission reductions, whereas, as I said earlier, sustainable aviation fuel and biodiesel have ready-to-go markets right here within Australia, right now. While important, establishing and supporting a strong hydrogen industry would take longer and need enormous investment, much more investment than low-carbon fuels, plus commitments to infrastructure developments before it can be used to add value to our economy. As such, to ensure Australia remains competitive on the global stage, we must commit to and incentivise our low-carbon fuel industry.

Currently, Singapore, which will likely be the dominant producer in our region, is setting the standard for SAF production. To level the playing field for Australian producers, we must aim to produce SAF at a cost close to Singapore's benchmark; however, achieving that alone will not make our industry globally competitive. The goal must be to close the gap between what is called jet A1 fuel and sustainable aviation fuel. To do this we need to bring the cost of low-carbon fuels, and that is why I will be introducing an amendment to include production tax credits for low-carbon fuels in this bill.

Linda Reynolds (WA, Liberal Party) Share this | Link to this | Hansard source

I too rise to speak on the Future Made in Australia (Production Tax Credits and Other Measures) Bill 2024. Here we go again, with Labor spending lots of money on Redbridge and other research agencies to come up with these really trendy research driven titles that really bear no relationship to what is actually in the bill. Not only does that apply to Future Made in Australia, but one of the things those opposite have assiduously not spoken about is actually what the bill is about—that is, the production tax credits. We heard from Senator Pratt all about Peter Dutton and the nuclear energy issue, supposedly, in Collie, and about everything else except what this bill does and does not do.

Future Made In Australia does sound good on the face of it, but this particular bill is about the production tax credits, and that's what I want to spend my time in this place talking about. Sadly, as to this bill, despite all of the rhetoric from those opposite—'This is going to help our critical minerals industry and our rare earths industry; this is going to fix all of the ills that currently bedevil the industries and now make it impossible for an Australian company, even when they find a critical mineral, a rare earth or any other commodity'—those opposite have now made things far worse, including with the Future Made in Australia—

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

Order! Senator Reynolds, please resume your seat.

Debate interrupted.